MORATORIUM OF PAYMENTS IN THE DUTCH CARIBBEAN (II)
The debtor may make an offer of composition
The nature of a Netherlands Antilles’ moratorium differs substantially from a moratorium under US law and does, in particular, not cause pending proceedings to be stayed. Generally, a moratorium in the Netherlands Antilles protects a debtor from claims existing at the time of the moratorium. It does not prevent litigating such claims, but judgments obtained cannot be enforced.
During a moratorium, the creditor is prevented from enforcing ordinary agreements against the party to which the moratorium is granted. Instead, creditors may file their claims with the administrator in the moratorium. If the performance of the obligation that is frustrated by the moratorium has no monetary equivalent, its value is assessed.
The party to which a moratorium is granted may make an offer of composition to its creditors, offering to settle all claims, for example against payment of a certain percentage of their claims. If accepted by a number of creditors representing at least 75% of all creditors admitted to the vote and representing at least 66,6% of the total amount of acknowledged debt, then the composition is binding for all the creditors (even on creditors who failed to file their claims and on creditors not admitted to the vote). The composition is furthermore subject to the bankruptcy court’s approval, however this is usually a formality.
The Netherlands Antilles Bankruptcy Law (“Faillissementsbesluit 1931“) contains a provision allowing any creditor to request the Court to end the moratorium, if
- the estate (i.e. the financial position of the debtor) renders continuation of the moratorium undesirable, or
- if the debtor has jeopardized or tried to jeopardize the interests of the creditors.
Continuation of a moratorium is undesirable if, e.g., the financial position of the debtor allows it to meet all its obligations.
Karel Frielink
Attorney (Lawyer) / Partner
